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A closer look at IFRIC 23 and the challenges that lie ahead

(Second of two parts)

In last week’s article, we laid down the foundation of the International Financial Reporting Interpretations Committee 23 (IFRIC 23) by discussing the key requirements of recognizing uncertain income tax treatments. The initial application of a new accounting standard often poses questions and challenges. Today, we take a closer look at concrete applications of IFRIC 23, as well as the challenges and key considerations it entails.

INHERENT CHALLENGES AND CONSIDERATIONS
Suppose an entity elects, as its tax practice moving forward, the deduction of expenses regardless if these were subjected to the corresponding withholding taxes. And based on the entity’s assessment, this tax practice is considered an uncertain tax treatment within the scope of IFRIC 23.

The Tax Code provides that a deduction be allowed if it is shown that the tax required to be withheld has been paid to the Bureau of Internal Revenue (BIR). However, under Revenue Regulations (RR) No. 6-2018 issued by the BIR, in case the tax was not withheld, a deduction will be allowed if the withholding agent pays the tax, including the applicable penalties due to the late payment, at the time of audit/investigation or reinvestigation/reconsideration.

Since the expenses may ultimately be allowed as deductions upon payment of the deficiency withholding taxes and penalties, this tax treatment could be interpreted as acceptable to the taxation authority. For consistency, the same tax treatment must be applied in valuing or measuring all related income tax accounts, including deferred taxes.

Recall that IFRIC 23 is to be applied retrospectively upon initial application — i.e., as if the tax treatment has been applied by the entity even in prior years. If the entity’s practice is to defer the deduction of outstanding accrued expenses until such time that they are subjected to withholding tax in the year of payment, the entity may need to quantify the potential restatement of accounts reported in prior years to comply with the transition requirement.

For an entity that has substantial outstanding year-end accruals, such potential restatement may be significant.

The entity may also need to consider amending previously filed returns so that the amounts reflected for tax purposes would be consistent with those reported in the financial statements. In a tax environment such as the Philippines, however, amendments restart the three-year prescriptive period for the BIR to assess deficiency taxes. Hence, the downside of an amendment is that it may expose an entity to certain risks, such as payment of interest and penalty.

With these implications, it may be paramount for an entity to evaluate the overall potential impact of IFRIC 23.

Note that income tax computation is a combination of tax treatments applied by an entity. As an evaluative measure, an entity may classify all of its tax treatments and identify which may be considered uncertain. Coordination among accounting, finance, tax, and legal functions is essential for a holistic and efficient assessment.

INTRICACIES AND IMPLICATIONS OF IFRIC 23 FOR FINANCIAL INSTITUTIONS
There may also be industry-specific tax treatments within the scope of IFRIC 23. Thus, it may be advisable to also consider perspectives from an industry standpoint for additional guidance.

Take for instance the case of banks and other financial institutions (OFIs). Their taxation is different when compared to other types of taxpayers due to the promulgation of RR 4-2011.

While the BIR issued RR 4-2011 which required banks and OFIs to identify or allocate expenses between their income streams (i.e., tax-exempt, tax-paid or those subjected to final taxes and taxable, i.e., subject to regular corporate taxes), lack of clear guidance and/or illustrations as to its application gave rise to differing interpretations. Banks and OFIs, to a certain extent, had their distinct method of identifying and allocating expenses to compute for the taxable income subject to income tax.

Consequently, the BIR challenged the method employed by banks and OFIs by issuing tax assessments. Due to the industry-wide implications of RR 4-2011, several banks filed a petition for declaratory relief before the Regional Trial Court (RTC) in April 2015. For a time, the BIR was precluded from issuing tax assessments relating to RR 4-2011 due to a temporary restraining order on the enforcement of the regulations.

In May 2018, the RTC declared RR 4-2011 null and void for having been issued beyond the authority of the Secretary of Finance and the Commissioner of Internal Revenue. In response, the BIR elevated the case to the Supreme Court (SC), where the resolution remains pending to date.

Given the status, questions arise as banks and OFIs endeavor to adopt IFRIC 23. With the lingering issue on how the petition will be decided, should banks and OFIs consider their method of allocation of expenses an uncertain tax treatment? If it is, then the requirements of IFRIC 23 must be taken into account.

Taking the issue a step further, should they still comply with the provisions of RR 4-2011?

Suppose, as a matter of electing a tax position, the banks or OFIs stopped their allocation of expenses (i.e., all expenses were claimed as deductions against income subject to regular corporate taxes). First, there is a need to establish under tax law that it is probable that the BIR and tax courts (i.e., taxation authority) will accept its tax treatment of not allocating expenses.

Second, since IFRIC 23 requires retrospective application, banks or OFIs may be required to re-compute their income tax due and payable to value and measure the related tax accounts for the comparative periods presented in the 2019 financial statements. Compliance may pose a challenge, especially if the amount of the transition adjustment is significant. Lastly, the amendment of previously filed income tax returns may need to be considered with caution for potential penalty risks.

In contrast, if the banks or OFIs decided to continue their practice of allocating expenses, there is a need to establish that the taxation authority will accept: (1) the tax treatment; and (2) the method employed.

Admittedly, there may be other considerations and challenges not discussed here that could arise as entities endeavor to adopt IFRIC 23. Thus, it is necessary to assess the interpretation’s overall implications and address the issues early on.

While taxation is often criticized for its complexities, the thrill of life (in accounting and tax, at least) can ironically come from the uncertainties driven by the imperfect interactions between taxpayers, taxing authorities, and their environment.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only and should not be used as a substitute for specific advice.

 

Gabriel Eroy is a Manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

(02) 8845-27 28

gabriel.eroy@pwc.com

The two words every central banker wants to hear

By Daniel Moss

FOR CENTRAL bankers around the world, acting locally now means thinking about China.

The spread of the coronavirus will likely hit mainland growth hard enough to warrant a global monetary-policy response. That means cuts in interest rates to follow last year’s easing steps. To do otherwise would be tantamount to denying the enormous role China plays in international commerce relative to 2003, the last time an epidemic dented the country’s expansion. At that point, global growth barely missed a beat. This time, it will suffer, and quickly. Central banks moved decisively as the trade war unfolded and global sentiment soured; discarding such a useful template would be a waste.

It makes sense that neighborhood cops would be the first-line of defense. The People’s Bank of China flooded the financial system with liquidity and pushed rates down within minutes of markets reopening Monday after an extended break. The Reserve Bank of Australia said Tuesday that the virus is having a “significant effect” on the country’s biggest trading partner. Though it kept rates on hold, many expect at least one cut is likely in coming months. The Philippines, which sets borrowing costs Thursday, is expected to trim. In India, the virus could be another factor that pressures the central bank to resume cuts, after aggressive reductions in 2019.

While all this is encouraging, policy action in Asia is necessary but insufficient. For a true global response, the Federal Reserve needs to come off the sidelines. This isn’t such a leap, despite the central bank’s preference to hold its benchmark rate after three cuts last year. Officials made clear since December that, in the event rates are nudged around, any move is more likely to be down than up. Stubbornly low inflation was troublesome well before the world’s attention turned to Wuhan.

Bond investors are starting to place bets on a Fed rescue. They are right to do so. In each of the three central-bank statements that announced cuts last year, the world’s challenges came first, inflation second: “In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower the target range for the federal funds rate to…” Last Friday, Vice-Chairman Richard Clarida called the virus a “wild card.”

Should the Fed wish to take out some insurance against a Wuhan-driven, worst-case scenario, it’s already laid the groundwork. Policymakers’ shift in tone and language shows how far we’ve come from the days when the world’s most powerful monetary agency barely looked beyond America’s shores. In more than 700 pages of transcripts from the Federal Open Market Committee meetings from the first half of 2003, SARS was mentioned 33 times and China, 19. That compares with 123 for Japan, which was in its second decade of economic funk. The Fed made its sole cut that year in June.

Whatever the Fed’s response, it won’t change the fact that China now accounts for 40% of growth in global gross domestic product. Beijing policymakers responded a lot more quickly than their American counterparts as the mainland economy began cooling in 2018, which was only exacerbated by the trade war. When the Fed eventually cut rates last July, that merely gave Asia’s regional central banks cover to continue on their path: Chairman Jerome Powell was an accelerator, not a catalyst.

That the US wasn’t the first mover is a historic shift. The dollar’s dominant role in finance means the Fed will remain the world’s most important central bank, but it’s no longer the only driver.

Now, everyone has a stake in China’s prosperity and its misfortune. Central bankers showed they understood that in 2019. They would be well-served to remember this lesson.

 

BLOOMBERG OPINION

How business firms perpetuate economic inequality

Our Constitution says that all economic agents, including corporations, shall contribute to the common good in order to achieve our country’s vision of a rising quality of life for all. More than 30 years after the ratification of the fundamental law, easily one-third of Filipinos are poor despite the official poverty rate now falling below 20% and healthy economic growth at nearly 6%. The World Bank reports that the country has one of the most persistent poverty problems in the region. And the concentration of wealth among the very rich continues to worsen every year.

A major aspect of the problem that almost never gets close attention is the role of business management practices in causing and perpetuating the economic gap. While entrepreneurship is an important option for some people, a big chunk of Filipinos hope to improve their lives by working in companies. But troubling questions need to be answered. How can people who work full-time in organizations that are growing and profitable still be poor? Why has the massive economic growth fueled by corporate value creation left so many behind?

The problem is rooted in prevailing management myths and non-inclusive management practices. The first myth is that organizations are essentially driven by a concern for greater efficiency. The notion that markets are efficient has been debunked by many studies. Still, companies often justify the vast differences between the pay packages of top managers and ordinary workers by claiming that there is a neutral market for talent.

The second myth is that organizations operate based on merit; that is, the way people advance and get rewards is based on capabilities and performance rather than connections, seniority, class, and other personal characteristics people are born with. This is far from the reality. For example, a professional service firm may emphasize high university grades as a reason for hiring one individual over another. However, the cultural and social capital that led to gaining acceptance in the university, provided access to advantageous internship opportunities, and allowed the applicant to identify with interviewers through shared interests are usually powerful reasons why the applicant was accepted.

MACROVECTOR AND FREEPIK

These myths support non-inclusive management practices especially in hiring, promotion, and compensation. Hiring determines who gains access to business organizations and the benefits in them. The most important, and recurring, hiring mechanism that reproduces inequality is when managers hire people based mainly on cultural similarity. When business leaders hire people who look and talk like them, know the same people, or have had similar lives and cultural experiences, they effectively lock out diverse individuals who can bring in needed talent and ideas while improving their own lives.

Even inside a business organization, unequal access to opportunities for promotion can be an important source of inequality. When this happens, moving up an organization is no longer a simple matter of performance. The help of mentors, powerful networks, and a display of the “right” behaviors all come into play in who gets to advance. In family-controlled businesses, for example, gaining the trust of key family members is often more important than performance itself. Jack Welch, the famed former Chairman and CEO of General Electric under whom the company’s share price rose by 4,000%, started as a junior engineer in the company in 1960 and became CEO 20 years later. How many Philippine companies can offer this possibility to those who start at the bottom?

Probably the worst non-inclusive business practices is in the area of compensation. Pay is the biggest income source for most employed Filipinos. However, some companies compensate senior management — through salary, bonuses, and equity — hundreds of times more than low-level workers. How can a company, no matter how financially successful, claim that its CEO creates 300 times more value than an average worker who directly serves paying customers? The market argument is conveniently used to support this practice when, in fact, senior positions are often not subjected to free market competition. Thus, the compensation structure in some companies resembles a feudal system, where workers toil at the bottom while the very few at the top enjoy the lion’s share of the fruits.

Professional managers have a role in making businesses more inclusive. They can hire people from more diverse backgrounds based on capabilities and the drive to contribute. They can make development opportunities and merit-based promotion available to all. Finally, they can make the gap between the compensation of senior management and that of the majority of workers smaller while enabling more workers to own equity.

This is what management for the common good looks like.

 

Dr. Benito L. Teehankee is the Jose E. Cuisia Professor of Business Ethics and Head of the Business for Human Development Network at De La Salle University.

benito.teehankee@dlsu.edu.ph

Sense of others

I worry that we are leaving our children, and their children, a world far worse than what we inherited from our predecessors. There is no doubt in my mind that there will be a tipping point at some time. When, where, and how, no one can predict. But, going by what is currently happening around us, it seems that point is nearing.

We are failing as stewards of the environment, and as vanguards of what is right and just. We are squandering what we have inherited from our ancestors, and, sadly, there appears to be little opportunity for our redemption. We must urgently endeavor not to completely fail our children and their descendants, and strive harder to make them better than us.

It is in this regard that I support the House of Representatives’ approval of the bill seeking to revive the Good Manners and Right Conduct (GMRC) subject in the grade school curriculum. The Philippine Star had reported that Congress had voted unanimously to pass House Bill 5829, on requiring GMRC as a separate subject from Kindergarten to Grade 3.

I support the bill not because it is a comprehensive solution, but because it is a start, an initiative to move in the right direction. And, also because it seems that many households, particularly in the urban areas, have already abdicated to schools the education of their children with respect to values and how to best conduct themselves particularly in public.

HB 5829 defines GMRC as “basic social values and etiquette,” and notes the need “to develop the character of the youth by making them recognize their intrinsic human value, enabling them to cultivate their ability to make excellent choices for themselves in relation to the greater community, thereby creating a culture of respect and love for oneself, for others and the country.”

I believe school instruction of GMRC should be supplemental. It is there mainly to complement what should be taught primarily at home. But, if it tends to contradict what is actually practiced in households, then it has the dual purpose of introducing the child to “good practices” — all in the hope that seeds of change can be planted in their young minds.

Instructing the young on “basic social values and etiquette” should be taken as a challenge by barangay leaders in particular, who can be more useful and relevant to their constituents by providing venues and opportunities for people to know more about GMRC at the grassroots level. People are never too old to be taught, or to learn, GMRC and its benefits.

People can be incentivized to attend instructional sessions and to practice the ideas conveyed. Compliance can be tied to assistance or welfare programs. Competitions can be hosted among barangays, and prizes can be offered as rewards for examples of good behavior. Awards for “friendliest,” or most “respectful,” or most “courteous” communities can be developed.

I recall a time when broadcast stations ran advertisements on radio and television related to good behavior, and the social values that Filipinos were supposedly known for. The advertisements were part of a major campaign supported by the state-run Development Bank of the Philippines. And then there was also the Ministry of Energy campaign regarding energy conservation, highlighted by the use of the Asyong Aksaya caricature by the late cartoonist Larry Alcala.

No man is an island, it is said. We all live in communities that we share with other people. Yes, there are inequities. This seems to be inevitable in any societal structure. However, living in communities necessitates the ability to live with others. GMRC plays an important role in this regard. To live peacefully with others requires mutual respect and a strong sense of others.

In more developed communities, particularly in urban areas, we have people living right next to each other for years but do not even know each other. New residents do not bother to introduce themselves to their neighbors, nor do older residents bother to welcome the new neighbors as they move in. People pretty much keep to themselves.

Even technology has had a heavy impact on how we deal with each other, as we can opt to socialize constantly on “electronic communities” but decline to spend more than a minute with other people face-to-face. If people lack strong social values strengthened by additional GMRC instruction, then their use of technology can also pose dangers to their ability to interact socially with others.

To be expected by society to behave a certain way, or to conform to certain norms, should not be seen as a limitation on freedom, or free will, or free expression. It is simply the appreciation that one does not live alone or in a vacuum, and that exercising freedom, free will, or free expression entails the responsibility of recognizing and understanding that such exercise can also affect others.

GMRC is not just about being right or wrong, or being proper or improper, or practicing socially acceptable behavior. People are always free to be “anti-social” if they choose to do so. But this should not, in any way, diminish their sense of others. GMRC is primarily about learning to respect one another, and recognizing that we live with others, and that we should also be mindful of them and not just ourselves. It is all about being a considerate human being. Now, pray tell, what will be the harm in teaching our children that?

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

Inflation, land transportation, and nCoV

Consumers in the Philippines continue to be penalized by high inflation. In 2018 when the TRAIN law was implemented, the country was the “inflation valedictorian” among the big and stable economies in East Asia with 5.2%. Last year, six economies had inflation rates of below 1% and yet the Philippines had 2.5%. In January, our inflation rate spiked to 2.9% (see Table 1).

Three commodity groups experienced significant price hikes in January this year compared with 2019 full year levels: alcohol and tobacco, education, and transport. All other commodity groups have had generally flat or mild decline in prices (see Table 2).

Big price hikes in alcohol and tobacco products are due to sustained tax hikes by the Department of Finance and Congress. The price hikes in education are due to a low base in 2018 and 2019. The same for transportation.

I am curious, did the expansion of transport network vehicle services (TNVS) into motorcycles — from about zero in 2018 to 27,000 by Angkas in 2019 — contribute to the sudden spike in transport inflation?

In TNVS cars, there are about 10 players — Grab, Hype, HirNa, GoLag, Iparra, MiCab, Mober, U-Hop, E-Pick me up, and OWTO. The Land Transportation Franchising and Regulatory Board (LTFRB) has set a maximum of 65,000 vehicles in Metro Manila, combined for all players. Dominant player Grab, with about 43,000 cars in 2018, retained the allotted cars with no increase almost two years after Uber left the Philippines and the rest of ASEAN countries. Booking demand keeps rising while the supply of TNVS cars has remained constant.

When it comes to TNVS motorcycles, the LTFRB accredited three players in 2020 — Angkas, JoyRide, and MoveIt — and they have a combined cap of 63,000 motorcycles, equally divided among the three players.

The competition among regular taxi, TNVS cars, and TNVS motorcycles seem to favor the latter because while the cap for taxis and TNVS cars was retained, the cap for the latter is expanding. From almost zero in 2018, this went to 27,000 through Angkas in 2019, and 63,000 in 2020 for the three players, which might be further expanded within the year.

This is good news for people who are willing to ride the two-wheel taxi. For people who want safer, more comfortable and air-con ride via regular taxis and TNVS cars, this is bad news. The LTFRB is sitting on their petition to expand the cap.

Now with nCoV scare, more people want to avoid high density transportation like trains and buses. They prefer to drive their own cars despite the heavy traffic, or take a regular taxi or TNVS car. So demand for the latter has increased but the supply has not.

The LTFRB must take this into consideration — not just passengers’ convenience and safe travel, but also safety from high-density mass transportation where potential virus transmission among people would be higher.

Expanding the cap on TNVS cars need not mean additional cars on the road. A simple change in the rules will do — like allowing cars that are up to five or six years old provided they are well-maintained, versus current restriction of cars that are three years or younger to apply for TNVS franchise.

The bottomline is that government via the LTFRB should step back from its bureaucratic and restrictive policy-making. Raise the cap, if not abolish the cap, for all TNVS vehicles — cars and motorcycles. Competition among them will ensure that the fares will adjust downwards while service quality and transparency will be maintained if not raised further.

The best judges to patronize or leave/boycott certain players and services will be the passengers, not the government bureaucracies. And with the dragging uncertainties brought along by the nCoV scare, the more passengers and commuters should be given leeway in choosing their forms of mobility. For travel convenience and health reasons.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Impermanence and Diligence

By Raju Mandhyan

STORIES IN New York claim that the way fathers in the apparel trade initiated their little sons into cutthroat business was by making them stand on a tall table and asking them to jump. “Jump,” they used to say, “trust me I will catch you!” And when the kid jumped the father would step aside and let the kid come crashing to the ground. “Never ever trust anyone in this business and that includes your father,” he’d admonish.

A bit extreme, I know, and it is a story. Stories are made up to make a point. The point being that one ought to be extremely, if not obsessively, diligent when it comes to conducting business anywhere and everywhere in the world. Scores of times I have invested time and money in the wrong people, in the wrong business, and banks that went belly up. It is not that all people and businesses are out there to cheat and dupe you. It is just that things change. Things are always in a flux. It is called impermanence.

Time and circumstance take over people’s lives, then their priorities and, sometimes, their values take a hit. All good thinkers, businesspeople need to take the impermanence of life into account when making promises or expecting others to fulfill theirs.

I share this because last month a friend bought a pre-loved car, paid a 100% in cash, and trusted the seller to transfer ownership to his name and mail the final documents. Thankfully the car is in his garage but legally it is still owned by the seller. It is not that he will not get the papers, but the chase can get stressful.

So it helps being diligent. In fact, I recommend being meticulously diligent while buying or selling anything:

• Make sure to take time to know, inspect, and study well the product or service you are investing in.

• Make sure that you understand the terms, the conditions, and the long-term promise the product or service makes.

• Take time to study how payment is to be made or received if you are a seller, in advance and well enough to avoid errors.

• It is best to pay in completion way after you receive, inspect, and test the service unless you are working with legit, reliable, and known sources.

• Always document all that you can before giving or taking delivery. No shame in this if you do it professionally and politely.

My father, also from the rag trade, used to say “measure twice, cut once.” In the Philippines there are many terms that express similar sentiments. Here are some and you can take your pick: masyadong masigasig, masinsinang pag-ingat, maging manapuri, etc. Do note that most of them have the ‘ma’ prefix similar to maximum, major, and mahatma.

I do hope all this makes a point for you. Trust people, recognize impermanence, and practice maximum diligence. Other than that, do remember that the sky is always high, water is always wet, and life in the Philippines is always more fun as long as you do not let your kids jump off a tall table and not catch them.

 

Raju Mandhyan author, coach and learning facilitator.

www.mandhyan.com

Europeans should say thank you to Boris Johnson

By Lionel Laurent

ONE SURPRISING knock-on effect of the UK’s departure from the European Union, which became official last week, was to bind the bloc’s 27 remaining members closer together. The British had expected the red-carpet treatment from national governments desperate to keep selling Italian prosecco, German cars, and French wine. They were instead shown the door by a united EU more focused on preserving the integrity of the single market, avoiding a return to a hard border in Ireland and settling the UK’s bill.

While you’d be hard-pressed to describe the EU as united on other issues, such as the upcoming budget, enlargement policy, or fiscal harmonization, the solidarity around Brexit is still there. The bloc’s top negotiator Michel Barnier, once dismissed as a has-been but now the closest thing Brussels has to a rock star, is leading the charge for a regulatory “level playing field” to govern any future trade deal with the UK — backed by similar calls from politicians in France, Germany, Italy, Ireland, and the Czech Republic. National priorities such as fisheries for France and Gibraltar for Spain have become European ones.

UK Prime Minister Boris Johnson has been quick to accuse Brussels of overplaying its hand. His response to demands for commitments on labor, the environment, and state-aid rules has been to threaten a bare-bones “Australia” deal — what’s basically close to no deal at all. That’s a calculated move to divide and conquer EU member states facing tariffs on goods worth some €47 billion ($52 billion).

Yet these threats are more likely to remind the Europeans why they should keep sticking together. The EU feels both existentially imperiled by Brexit and innately more powerful as a trading power. The more Johnson dismisses food-safety fears as “mumbo-jumbo” or mocks state aid as a purely foreign addiction, the more the EU will view the UK not as Australia, nor Johnson’s preferred alternative of Canada, but more like Mexico as seen through the eyes of Donald Trump: A top trade partner that’s also a dumping threat. Johnson’s protestations that Britain has a higher minimum wage than most EU states won’t fix the lack of trust motivating Brussels to take US-style steps to protect the bloc’s welfare. “The integrity of the single market has never been, and will never be, negotiable,” Barnier said last month.

While the worry is always there that the common front will eventually crumble — say with a side-deal brokered to protect one member’s interests over those of the 27 all together — it hasn’t happened yet for a few reasons. Professor Thierry Chopin of Lille’s Universite Catholique points to three drivers of unity: An attachment to the single market that’s shared even by very different member states; public opinion that’s more positive on the EU and less keen on politicians calling to leave the bloc; and the power imbalance between the UK’s 60 million consumers and the EU’s 450 million. It’s hard to see how Johnson can overcome the latter unless he knocks a US trade deal out of the park.

Preserving unity is also a way to preserve global influence. As a regulatory superpower, one that relies on trade deals and soft power to export its rules, Brussels is keen to ensure that having a UK-shaped gap in its single market won’t poke holes in flagship rules such as GDPR for data privacy or MiFID II for financial markets. This ability to influence regulation outside the single market is known as the “Brussels Effect,” a term coined by Columbia Law School’s Professor Anu Bradford, whose latest book argues that Brexit will likely strengthen the EU’s hand. Brexit has put both the UK and the EU’s dreams of regulatory autonomy on a collision course.

To be sure, there is always the risk of taking too tough a position in a negotiation, or of becoming overconfident. Brussels will have to bear in mind its own need to stay close to the UK, for access to the City of London’s markets and to defense and security partnerships. The economic cost of an abrupt return to tariffs would unleash a race for state support. It’s not clear the EU is ready for that.

Right now, though, there’s no reason to call for a climbdown. The 11-month deadline for these talks doesn’t play in Johnson’s favor, and the UK and EU economies aren’t likely to be any less intertwined at the end of this year than at the start of it. The rhetorical saber-rattling conceals room for compromise on both sides. With the US and China increasingly assertive on the world stage, Johnson’s antics mustn’t reverse Brussels’ Brexit togetherness.

 

BLOOMBERG OPINION

UHC Law: the opportunity of a generation

By Dr. John Evangelista

TWO YEARS ago, my sister was diagnosed to have Stage 3 colon cancer. Her treatments have depleted her life-long savings despite the help of the Philippine Charity Sweeptstakes Office and other government agencies. Unfortunately, a lot of Filipinos are in the same predicament. In fact, one of the main reasons why Filipinos migrate overseas is to make sure that they have access to good and affordable healthcare.

The Philippines has a major opportunity to improve the health of its people with the passage of the new Universal Health Care (UHC) Law to achieve more accessible healthcare for all.

The law requires LGUs to take more responsibility for the delivery of healthcare services. Local Governments now face a challenging timeframe to lead major reform and modernise their health systems.

Running healthcare services is one of the most complex and technically demanding roles that governments undertake, requiring effective infrastructure and high levels of expertise. Poor execution of the UHC reform is a major financial and political risk for Local Governments.

The UHC Law sets in place fundamental reform to the healthcare system in the Philippines. The legislation requires universal coverage by state insurer Philhealth. It also clearly defines the roles of key agencies in the leadership and provision of healthcare.

Within the reformed healthcare system, the Department of Health is the “steward of the health system” responsible for:

• National policy direction and strategic plans;

• Setting standards and guidelines for health;

• Regulating health services; and,

• Managing specialized tertiary health care.

Philhealth is responsible for the funding of individual health care, with universal coverage within agreed funding levels.

The UHC Law makes Provincial Governments responsible for a wide range of functions, with the most substantial challenge being the development of integrated provider networks that register populations, initiate health programs, provide coordinated care, and act as gatekeepers to secondary and tertiary services. The UHC Law requires that LGUs implement the required structural changes within five to seven years.

Central to the vision is the development of patient-centered “networks” of health services that operate according to the principles of high performing primary care. These “networks” will register patients and develop a lifelong relationship to support wellness and provide coordinated care when people are unwell. In essence, these “networks” are responsible for delivering integrated care to local populations.

Presently, only a handful of LGUs are poised to implement the new Law in their respective constituencies. There are major challenges to be overcome in achieving the UHC health system reforms.

• Capacity and capability — The country’s primary healthcare system remains underdeveloped, with a lack of capacity and capability within Rural Health Units and Barangay Health Stations, resulting in people presenting at hospitals for conditions that should be managed in family medicine clinics in the community.

• Resourcing — There are relatively low levels of healthcare resourcing within the Philippines health care system by international standards. Thus, solutions must be smart and make better use of all resources, particularly the workforce, that we already have.

• Facilities and equipment — Whilst there are some modern facilities in the National Capital Region, many of the Rural Health Units and Level 1 Hospitals require upgrading with improved general amenities and access to medical equipment.

• Workforce — Generalist family medicine doctors form the core of an effective primary care system; however, most doctors prefer to specialise, leading to a shortage of a family medicine workforce and a small number of doctors working in the community, with the ratio significantly lower than developed countries.

• Management — There is an existing healthcare infrastructure across the country, but a lack of professionalized healthcare management to support organized service and integrated care.

• Monitoring and performance — There are not strong systems for monitoring performance and quality standards across the health system or for proving feedback on performance to various clinics and hospitals.

• Clinical pathways — Clinical systems, such as referral pathways, are not well defined. However, there are some promising beginnings to improve referral processes between primary care and hospitals.

Indeed, there is much to celebrate as we usher in this new era of “healthcare for all” in the Philippines. However, a lot of work still needs to happen to ensure that we make the most of this opportunity of a generation.

 

Dr. John Evangelista is an expatriate Filipino based in New Zealand. Over the past 30 years, he has led healthcare reform in Asia, the UK, the Middle East, and New Zealand. He is currently advising LGUs in the implementation of the UHC Law.

Casimero pumped for big fight against Inoue

WORLD BOXING ORGANIZATION bantamweight champion JohnRiel “Quadro Alas” Casimero of the Philippines is ready to go into battle against undefeated Japanese World Boxing Association (WBA) and International Boxing Federation (IBF) champ “The Monster” Naoya Inoue of Japan in April.

A unification bout happening on April 25 in Las Vegas, Mr. Casimero (29-4) expressed his excitement over what they in their camp view as a huge fight that should solidify further his standing in boxing in the event of a victory.

“This is it. I’m excited for this fight. Inoue is a big challenge but I intend to fight it out and come away a winner,” said Mr. Casimero, a three-division champion, in the press conference announcing the big fight at the Amelie Hotel Manila in Malate on Wednesday.

“We are getting down to work and see how we can come up with a strategy that can effectively be used against Inoue,” the 30-year-old slugger added.

Mr. Casimero was to leave for Miami, Florida, today to set up camp and get his training rolling.

In the first month, on tap for him is strength and conditioning before elevating his preparation moving forward.

STREAKING
Ormoc native Mr. Casimero is coming off a win over South African Zolani Tete by way of a third-round knockout in Birmingham in November.

He is currently riding a five-fight winning streak, his last lost coming in September of 2017 at the hands of compatriot Julius Sultan.

Mr. Inoue (19-0), for his part, beat Filipino champion Nonito Donaire by unanimous decision in Saitama, Japan, also in November.

Since turning professional in 2012, the Japanese has copnquered all-comers put in his way en route to becoming a three-division champion as well.

Both fighters are making their second trip to the United States to fight.

But the Filipino has fought in more places, having gone to Nicaragua, China, Mexico, Argentina and the United Kingdom, among other places.

It something Mr. Casimero’s camp believes that would work to their advantage.

Considering the form Mr. Casimero is in, MP Promotions president Sean Gibbons said undefeated Mr. Inoue is in for a tough challenge in the April fight.

“Inoue picked the wrong Filipino to fight because JohnRiel will give it to him. Come April there would be a new WBA and IBF champion,” said Mr. Gibbons.

Mr. Casimero is managed by MP Promotions.

Coverage of the fight locally is in the process of being worked out, Mr. Gibbons said, adding, a huge fight like the Casimero-Inoue fight deserves to be seen by the Filipinos. — Michael Angelo S. Murillo

Harden leads Rockets past Hornets, 125-110; Milwaukee tops New Orleans

HOUSTON — James Harden finished one rebound shy of a 40-point triple-double, and the host Houston Rockets erased a 15-point deficit to beat the Charlotte Hornets, 125-110, on Tuesday.

Harden was exceptional throughout but especially down the stretch, fueling a 12-3 run in the fourth quarter that enabled Houston to secure control. He finished with 12 assists, nine rebounds and three steals as the Rockets prevailed despite the absence of Russell Westbrook (thumb) and Clint Capela (heel).

Miles Bridges and Terry Rozier scored 20 apiece for the Hornets, who have dropped four in a row and 12 of their past 13 games. Bridges added a game-high 15 rebounds.

In New Orleans, Giannis Antetokounmpo had 34 points and 17 rebounds, and visiting Milwaukee used a third-quarter surge to pull away from the Pelicans, 120-108.

The Bucks trailed for most of the first half and were down 61-58 at halftime before outscoring the Pelicans 42-24 in the third quarter. Antetokounmpo scored 16 in the period. Fellow All-Star Khris Middleton added 20 points for Milwaukee.

All-Star forward Brandon Ingram led New Orleans with 32 points, and rookie Zion Williamson scored 20 (although on 5-of-19 shooting). — Reuters

Rubilen Amit to spend ‘quiet’ 2020 working to stay fit

By Michael Angelo S. Murillo
Senior Reporter

AFTER A BUSY 2019 where she competed in various tournaments that spawned good results, Filipino billiards star Rubilen Amit said this year would be a quiet one but she is not letting it go to waste, taking it as an opportunity to focus on her health and wellness.

Ms. Amit was all over the place last year competing, positioning well which she considers a blessing.

She first competed in the Japan Open in July where she placed second then followed it up with another runner-up finish in the China Open in September.

Ms. Amit, 38, then suited up for the national team in the 30th Southeast Asian Games, producing two gold medals (9-ball singles and women’s 9-ball doubles) and a silver (10-ball singles).

She capped the year by winning bronze in the 2019 Women’s World 9-Ball Championship in December where she also won the sportsmanship award.

“It was a very good year for me in 2019. It was such a blessing,” said Ms. Amit, who was included in the list of 50 greatest Filipino athletes of all-time in the 2020 edition of the Philippines Yearbook, in an interview.

But unlike last year, Ms. Amit, currently the number four women’s player in the world, will be having a slow year in 2020 as most of the high-profile competitions will take place in 2021.

She said she will take the downtime to stay fit and prepare for the tournaments ahead.

“2020 will be quiet. First half of the year there are not much events. Probably things will pick up in the third and fourth quarter. I will take this break as an opportunity to stay fit for next year where there will be a lot of tournaments,” she said.

Tournaments she is targeting for next year are the World Games in Birmingham, USA; Asian Indoors in Thailand; and SEA Games in Vietnam.

These are apart from the world ranking tournaments she is set to compete in.

The Cebu native added she is hoping that billiards will be included in the 2022 Asian Games in China after being dropped in the two previous editions of the sporting meet.

Moving forward, believing that billiards is something that Filipinos can truly excel in, Ms. Amit expressed hope for the sport to be given the support and attention it deserves.

She cited her achievements and those of Efren “Bata” Reyes, Francisco “Django” Bustamante and, now, Chezka Centeno and Carlo Biado, among others, as a testament to the great potential of the sport among the Filipinos.

“There are a lot of opportunities in billiards, but I guess right now that’s the cycle and other sports are having more exposure and the limelight. But I believe billiards’ time will come again. There are many world-class talents here in the sport,” Ms. Amit said.

Fajardo suffers leg injury, out indefinitely

FIVE-TIME Philippine Basketball Association most valuable player June Mar Fajardo of the San Miguel Beermen is to miss time on the court after suffering a leg injury in practice at the weekend, his mother team announced on Wednesday.

In a statement shared to members of media, San Miguel confirmed that Mr. Fajardo will be out indefinitely as he starts rehabilitation on his injured right leg.

The San Miguel big man suffered a complete fracture on his right tibia during team practice on Feb. 3.

He went under the knife the following day.

Mr. Fajardo’s injury came just as they are preparing to make a run at a sixth straight Philippine Cup title beginning on March 1.

The team said the “Kraken” is to miss the entire tournament at the very least and will not be able to join any upcoming international competition.

The San Miguel management shared that it will give Mr. Fajardo the best medical care possible, just as it thanked the fans for the messages of concern and well wishes.

San Miguel opens its title defense on opening day against the Magnolia Hotshots Pambansang Manok on opening day at the Smart Araneta Coliseum. — Michael Angelo S. Murillo

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